NVIDIA Corporation (NVDA), Intel Corporation (INTC): How Weak Is This Semiconductor Company?

Good products, but is it a buy?

Advanced Micro Devices, Inc. (NYSE:AMD)’s PC sales have also taken a hit, forcing the company to restructure. Its custom processors are proving to be winning designs. The company has managed to succeed in getting Sony to its kitty for its next-generation PS 4 gaming console from NVIDIA Corporation (NASDAQ:NVDA). It is also extremely near to grab Microsoft Corporation (NASDAQ:MSFT)‘s new Xbox 720 processor, too. This should definitely give the company a cushion to survive the fast changing industry even though its position in the PC market remains unstable.

Further, Advanced Micro Devices, Inc. (NYSE:AMD) tries to benefit from the shifting needs of its clients towards custom- built processors. Most of its consumers lack the expertise to design and make processors, which should benefit AMD with its CPU and GPU capabilities. A lot depends on how the company’s embedded processor segment performs as AMD expects 20% of its revenue this year from that segment. It has also got an excellent integrated graphics processing product for the medical industry.

Advanced Micro Devices, Inc. (NYSE:AMD) definitely has the products but it is losing cash and has a weak balance sheet that makes me apprehensive about putting my money in this company. Further, its stock price has surged 70% in the last one month so I do not expect it to rise much further.

Final words

The market might seem to be a little cruel with NVIDIA Corporation (NASDAQ:NVDA) as its major future revenue- generating venture of Tegra 4 and 4i has not yet started commercial production. The tech industry reinvents itself every day and technology becomes obsolete in the wink of an eye.

Signs of a tech company stagnating in this lightning paced industry can spell doom as stagnation symbolizes a lack of innovation. It may be too early to say that NVIDIA is weakening, but it surely needs to go over its plans swiftly and return with more of an impact to gain its lost foothold.

tarun bachhawat has no position in any stocks mentioned. The Motley Fool recommends Intel and NVIDIA. The Motley Fool owns shares of Intel.